Economics is not a Natural Science

Posted Aug. 13, 2009 at 1:04 PM

http://susiemadrak.com/2009/08/13/12/04/economics-is-not-a-natural-science/

Douglas Rushkoff executes an absolutely brilliant takedown of the current economic model (weirdly, you have to scroll down the page a bit to find the beginning. Hint: it's next to the picture of his book):

While we can find evidence of the corporate marketplace biasing the application of any field of inquiry, it is our limited economic perspective that prevents us from supporting work that serves values external to the market. This is why it is particularly treacherous to limit economic thought to the game as it is currently played, and to present these arguments with near-scientific certainty.

The sense of inevitability and pre-destiny shaping these narratives, as well as their ultimate obedience to market dogma, is most dangerous, however, for the way it trickles down to writers and theorists less directly or consciously concerned with market forces. It fosters, both directly and by example, a willingness to apply genetics, neuroscience, or systems theory to the economy, and of doing so in a decidedly determinist and often sloppy fashion. Then, the pull of the market itself does the rest of the work, tilting the ideas of many of today's best minds toward the agenda of the highest bidder.

So Steven Johnson ends up leaning, perhaps more than he should, on the corporate-friendly evidence that commercial TV and video games are actually healthy. (Think of how many corporations would hire a speaker who argued that everything bad — like marketing and media — is actually bad for you.) Likewise, Malcolm Gladwell finds himself repeatedly using recent discoveries from neuroscience to argue that higher human cognition is more than trumped by reptilian impulse; we may as well be guided by advertising professionals, since we're just acting mindlessly in response to crude stimuli, anyway. Everything becomes about business — and that's more than okay.

This widespread acceptance of the current economic order as a fact of nature ends up compromising the impact of new findings, and changing the public's relationship to the science going on around them. These authors do not chronicle (or celebrate) the full frontal assault that new technologies and scientific discoveries pose to, say, the monopolization of value creation or the centralization of currency. Instead, they sell corporations a new, science-based algorithm for strategic investing on the new landscape. Higher sales reports and lecture fees serve as positive reinforcement for authors to incorporate the market's bias even more enthusiastically the next time out. Write books that business likes, and you do better business. The cycle is self-perpetuating. But just because it pays the mortgage doesn't make it true.

In fact, thanks to their blind acceptance of a particular theory of the market, most of these concepts end up failing to accurately predict the future. Instead of 25 years of prosperity and eco-health, we got the dotcom bust and global warming. Immersion in media is not really good for us. *People are capable of responding to a more complex call to action than the over-simplified and emotional rants of right-wing ideologues. The decentralizing effect of new media has been met by an overwhelming concentration of corporate conglomeration. *

These theories fail not because the math or science underlying them is false, but rather because it is being inappropriately applied. Yet too many theorists keep buying into them, desperate for some logical flourish through which the premise of scarcity can somehow fit in, and business audiences won. In the process, they ignore the genuinely relevant question: whether the economic model, the game rules set in place half a millennium ago by kings with armies, can continue to hold back the genuine market activity of people enabled by computers.

Go read the whole thing. It's long, and in places the skimming over of several centuries in a few paragraphs doesn't necessarily do the argument justice, but it's fundamentally sound and it goes a long way toward waking one up to the absurdity of blindly accepting the Doctrine of the Holy Open Market.